When we assess risk in business clients one of the issues we should be thinking about is their competitive advantage and how sustainable it is to ensure that the business will be around for a while – or at least long enough for us to get paid back if we lend to it.
Competitive advantage is what separates the business from its competitors and is what brings it customers. If customers don’t see any advantage to them in buying goods or services from this business, why wouldn’t they just go to another supplier?
So the question is, why don’t we also focus on what our competitive advantage is – not as a bank but as a banker? In other words, what do you personally bring to the client that they can’t get from any other banker? Can you answer that question without thinking about it? If not, you have some thinking to do.
If the next prospective client that you meet says to you “why should I bank with you?” what is your automatic response? Please don’t say “better service”. That’s too vague an answer – be prepared to explain exactly what that better service is and how it helps the client. Remember that a competitive advantage is only that if the client finds it valuable – that’s all that counts.
So define what that response is and practice it so that you don’t have to think about it when the client asks the question. And even if they don’t ask the question, tell them anyway!